Major cannabis entrepreneur sues San Bernardino over new marijuana-license ordinance

The cannabis company owned by a Pacific Palisades woman whose marijuana growing operation was uprooted by San Bernardino police late last year is suing the city to overturn a new ordinance addressing commercial cannabis businesses.

The suit – filed Friday by Bubba Likes Tortillas, which owns a lot of property used for cannabis businesses – says the ordinance violates Prop. 64 and other California laws. The San Bernardino City Council unanimously approved the ordinance March 7.

San Bernardino police serve a search warrant on an active, large-scale marijuana operation at the old Pac-Bell building in San Bernardino, Calif. on Wednesday, Dec. 13, 2017. (Photo by Rachel Luna, The Sun/SCNG)

Stephanie Smith, owner of Bubba Likes Tortillas, claims the ordinance creates a monopoly for certain cannabis license types and bans “any person who has ever had anything to do with cannabis … from entering the legal market.”

City Attorney Gary Saenz said by phone Monday, March 26, his office had received the lawsuit earlier in the day and hadn’t had time to review it and offer a comment.

The ordinance – one of three passed earlier this month – says the city can award only 17 cannabis business licenses in this first year; with 19 different cannabis license types available under California law, certain businesses can hold a monopoly on the marketplace, the suit says.

State law grants cities the authority to limit cannabis businesses as they choose.

Additionally, Smith claims, the ordinance disqualifies any cannabis-related enterprise previously labeled as non-compliant with city law from holding a commercial license. And a renewal could be denied if a business owner is found to have operated in violation of city or state law.

Cities such as Los Angeles and Oakland are going the opposite direction and giving priority in licensing to business owners who’ve had cannabis-related convictions in the past. Such social equity programs have been created to help undo some of the historic harms from the war on drugs.

San Bernardino’s requirements violate due process, the suit says. They do “not require a conviction, administrative hearing, or any other process other than that the City of San Bernardino has determined that the actions occurred.”

“This misguided ordinance is a backdoor ban that continues the City’s illogical campaign against a legal product,” Smith said in a statement.

Smith made headlines late last year when San Bernardino police seized nearly 25,000 marijuana plants at three Bubba Likes Tortillas locations as part of an intensive investigation. One of the locations was less than a block from the rear of the police station.

Smith’s home also was raided. She was not arrested, though eight men at the sites were arrested on suspicion of cultivating marijuana. Less than a week later, nearly 4.5 tons of marijuana was seized at another warehouse owned by Smith.

Voters in 2016 passed Measure O, a ballot measure requiring the city allow marijuana dispensaries in certain areas. Three permits were awarded, including one to the Flesh Showgirls strip club on Hospitality Lane. Measure O’s validity later was challenged in court, putting those permits in limbo.

Smith’s operations were uprooted Dec. 13 and 19. On Dec. 20, city leaders passed a temporary moratorium on certain marijuana activities not covered by Measure O. Nine days later, a San Bernardino County Superior Court judge tentatively ruled Measure O invalid for spot zoning – that is, singling out parcels of land for uses benefiting their owners at the expense of others in the surrounding area.

San Bernardino strip club Flesh Showgirls just got a permit to operate a marijuana dispensary. (Cannifornian/SCNG file photo)

Under Measure O’s zoning restrictions, Judge David Cohn wrote, only two locations in city – one being the Flesh Club, which is not associated with Bubba Likes Tortillas – would be allowed to sell marijuana.

Captain Jack’s, a dispensary at the Flesh Club address, opened to the public in January with a city and a state license.

On Feb. 1, the City Council extended the temporary moratorium up to 10 months and 15 days. At the end of the month, Cohn declared Measure O invalid in his final, written decision. An appeal was filed on behalf of the Flesh Club owner, and Saenz said the court ruled Monday that dispensaries operating with a Measure O permit and a state license can continue operating in the city until at least April 27.

The court at that time is expected to make a determination on the city’s new commercial cannabis ordinance, Saenz said. “There’s a lot going on in the cannabis world as far as San Bernardino is concerned right now.”